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Who Trusts Washington?

Americans voted for President Obama, and he receives high approval ratings in polls. But that does not mean that people now think the government has a good economic policy.

The University of Michigan preliminary consumer sentiment numbers for February came out last week, while I was out sick, so I just got around to looking at them today.

I was mildly surprised to see that the percentage of Americans saying the government was doing a good job with its economic policy was up only to 10 percent.

It turns out that Americans have always been that way. There have been four presidential elections since the Michigan survey began in which the incumbent party was voted out with the economy being a big part of the reason. After none of the elections did belief that the government had a good economic policy rapidly shift when the new team took over. Discontent with the people thrown out is not the same as confidence in their replacements.

The elections I include are 1976, 1980, 1992 and 2008. I exclude 2000, when the White House changed hands even though there was not widespread discontent with economic policy.

There may be a long-term trend of Americans being more willing to view government economic policy as bad if things are not going well.

The following numbers show changes from October of an election year — the last month before the election — to February of the next year — the first month that the new man is in office, but far too early for his policies to have had any real impact. (In 1976-77, when the survey was taken less frequently, the changes are from August to February.)

The question offers three choices for views of government economic policy, good, only fair, or bad. I have left out the middle category in the results.

At any given time there will be a bloc on the left that think the goverment isn’t doing enough and a bloc on the right that believe it’s standing in the way.

Any incoming president is saddled with unrealistic campaign promises they are forced to make to get elected. once there though, reality can be a real SOB, and this will hit the incoming administration before the pundits and activists ever feel it. The starry eyed on the winning side will see it as broken promises, the stauch supporters of the losing side will see anything as a step in the wrong direction. Kind of a no win situation.

Looking at the shifts in the “good” and “bad”, before and after, I assume the “goods” in the after column are in the top 10 percent of income earners and the balance are the rest of us working stiffs who lost their jobs, businesses, or got twice as much work heaped on them because someone else got laid off, and did not get any more money for the added work.

You may add me to those who are very disappointed by the economic policies of the new administration.

First of all, I deplore the complacent statement of one liberal senator who said words to the effect that the American people do not care that the bailout has “porky” elements. Pork is waste, and we cannot afford waste, especially when so many are desperate. I do not mind paying taxes to help those less fortunate than I, but I sure do mind being taxed for “pork.”

Secondly and more important economically (though not morally): The bailout is the opposite of what we need, and will make our problems worse than they are. How will we pay for it ? (1) higher taxes? — They will undo stimulation, (2) increasing low interest debt to foreign central banks? Not practical because FCB worry about higher inflation, declining bond prices and hence less than zero real return, (3) increasing debt to domestic purchasers? Counter-productive because increasing debt will lead to sharply higher long term interest rates.

Some people say “not to worry” because other countries are even worse off than we; so, they argue, the dollar will remain the lead reserve currency. But as defaults increase, people (and central banks) will be more and more reluctant to lend low interest, long term money to anyone at all. That means less credit all around, deepening recession, lower volumes of world trade and further economic contraction. Some may point to the Great Depression, arguing that “pump-priming” is just what we need now. But at the onset of the Great Depression we were not mired in debt at every level– individual, corporate, local, state government and federal government.

What people need to know is that the U.S. is going to balance its budget and will not inflate its debts away, that it will not support unproductive industries, that there will not be any give-a-ways, and that there will not be any waste. Compassion: yes; waste: no. They need to believe in us, but who could believe in the latest bailout program? Especially when an important proponent admits that it is “porky.”

Perhaps a more interesting value than the number saying they do a good job, is the number saying they’re doing a bad job – there you had the worst “before” value of the lot, and while the “atfer” number is still bad, it does at least show substantial improvement.

Eeek. I just noticed. What’s hidden away in this data, though, is that the middle is shrinking ! Is this connected to the middle class shrinking ?

Somebody please tell us why Geithner is now the man in charge of fixing this mess when he has been at the center of it before it even started? Is there not one in 300 millions who can do that job?

He is part of the troika who has succeeded in turning a problem in the subprime mortgage business into a full blown global economic crisis.

This toxic assets problem needs to be dealt with NOW! Stop studying it. The FED is the only institution that can tackle this head on. Not the Treasury, not the private sector, not even Congress! Take all the bad mortgages at some value, say 60 cents on the dollar, and then let the banks buy them back one piece at a time over the next fifteen to thirty years and write them off or dispose them slowly but orderly.

Forget about trying to value them. If they can’t do that by now, they never will be able to. Forget about the private sector, the private sector is in shock. Forget about asking Congress for more money, politically it is DOA after TARP and the stimulus.

And tell these genius economists to stop harping about Japan’s lost decade. The 1930s was lost t o the US. The 1990s was lost to Japan. The 2010s will be lost to us all. A decade is what it will take to get out of the borrowing and spending binge of the last thirty years. There is no quick fix to this mess. Stop looking for it.

“Call me Arne” has already torn up his mission statement to save as many teachers’ jobs and children’s schooling as possible. He has declared he will use it to ride his own hobby-horses over these threatened lives. Changing direction now will harm far more children than it helps. The children are your priority, aren’t they, Mr. Secretary?

New education policies, and experiments, all good things in themselves, require extra teachers and buildings, funded out of increased budgets. Arne’s budget will not replace that lost from State funding.

With half the cabinet wallowing in their own little troughs, how can any economic policy, as agreed by Congress, work?

“Whoever controls the volume of money in our country is absolute master of all industry and commerce. . .”

Well just about, which indicates that the volume of money should be a matter of public understanding, discussion and concern, and in a democracy, the question would be settled in Congress. Rather as Tom Paine said.

Any survey taken at the bottom of an economic cycle would be tainted one way of the other by everyone being in a really bad mood.

We all feel like the guy who came home and found pigs ripping up his front lawn, got mad at the pigs for 5 minutes which didn’t do any good because pigs will be pigs, then realized that maybe he shouldn’t have stopped taking care of his fence because it cost him too much.

The point of that weird story ? The government and the American people are ultimately responsible for this mess by allowing Republicans to deregulate everything — and yelling at a bunch of bankers who only did what they were allowed to do and threatening to nationalize their banks, isn’t getting us anywhere.

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Economics doesn't have to be complicated. It is the study of our lives — our jobs, our homes, our families and the little decisions we face every day. Here at Economix, journalists and economists analyze the news and use economics as a framework for thinking about the world. We welcome feedback, at economix@nytimes.com.